Behind The Headlines - The New Energy Bill

Despite promises of a radical shake-up - followed by months of bickering - the new Energy Bill delivers business as usual with the big six energy companies still dominating our energy supplies, says Bibi van der Zee

We have a new energy bill that placates and sucks up to the big energy companies

England is underwater, it seems. The rain is falling – splat! – from the leaky gutter by the window as I write, and with every day it looks more and more likely that, just like Winnie-the-Pooh, I will soon end up sitting on a branch with jars of honey lined up beside me, sending out messages in bottles. “Help! Bibi (me). It’s me Bibi help help!”.

Families canoe down village high streets, or spend their evenings bailing out the local pub. The rain comes on more heavily every night, and now is moving into the north. The land lies beneath heavy grey cloud, water pooling and collecting in every ditch and field.

Against this backdrop, as insurers plead with politicians, as a month’s rain falls in a day, as negotiators are wearily heading off for yet another round of special pleading at the UN climate negotiations (COP18) in Dohar, here the energy bill battle has entered a tiny lull. Last week, like a long-brewing marital row, everything suddenly came to a head. On Thursday labour leader Ed Miliband raised his sword in a field of wind turbines and pledged to adopt the decarbonisation target that campaigners have been pleading for. This, of course, meant that the Deparment of Energy and Climate Change (DECC) was forced to leap into action in order to keep Miliband off newspaper covers; it duly announced that a deal would be released at midnight… Midnight! And it worked! Miliband was relegated to an inside story so that every paper could carry the news that wind turbines would be driving our bills up by £100s every year.

So what does it all really mean? Dr Alan Whitehead MP sits on the energy and climate change committee and has been a huge believer in renewables since the 1980s when he introduced geothermal energy to the civic centre in Southampton. He points out that despite having promised - way back in the day when the bill was first mooted - a radical shake up of the electricity market, this bill will in fact deliver nothing of the sort. “It’s still all about the market,” he says, his mouth twisting wryly. If that’s the case then will the big six be satisfied with this bill, I ask him? He nods. “I should think so.”

In short, despite months of bickering over this reform, we will still end up with the big six energy companies dominating our energy supplies. They will still own most of the power stations in the country, will still buy and sell from themselves in a market which we now know to be operated fairly liberally; they will still set prices as they please, and even after all this, they will still have no decarbonisation target.

The contrast is all the more powerful because I’ve just been reading Osha Gray Davidson’s Clean Break – a riveting account of Germany’s energy revolution or the Energiewende as it is better known. There, pressure from a population increasingly concerned about acid rain and climate change and dwindling supplies of coal brought about the Renewable Energy Act (EEG) in 2000 with the aim of breaking the utility monopoly and getting energy production out into everyone’s hands. The legislation there used instruments like feed-in tariffs to prompt people into becoming their own generators by allowing them to sell excess energy back into the grid and make some tasty profits.

The result, as has been well documented, has been spectacular in terms of renewable growth, and Davidson has traveled to meet some of the people now running their own collectives all over the country. Eva Stegen, the director of EWS - Germany’s first clean energy co-op - tells Davidson: “Einstein said that the way that leads into a catastrophe cannot be the way that leads out. Centralised energy was the problem. So we needed to find a new way. And that is what the EEG gave us.” One commentator has described the results of the EEG as “a strange mixture of idealism and greed”.

Whether it has succeeded in its aim of breaking the utility monopoly in German is still not completely clear (the long-read piece does not give as much detail here about the rest of the German market as I would have liked). It is true though that more than 50% of all German renewable capacity is owned by individuals or collective, while the Big Four only own 6-7%. But more than that, it is impossible not to feel a twinge of envy at a government that would try such a thing.

Here, meanwhile, we have the vision of our government, prone, as usual, in front of big business interests. We have a bill that placates and sucks up to the big energy companies, with consumers left, as usual, to watch the giant profits sailing out to shareholders while they pick up the bill.